BBB Releases New Nonprofit Standards
Among the rules is a requirement to give consumers who donate to nonprofits the option to opt out of having their information shared with third parties. Another new rule requires nonprofits that solicit donations via the Internet to provide consumers with online access to financial reports.
Most of the new rules are to take effect in a year. The standards also include previously existing bureau requirements for nonprofits, such as a rule requiring nonprofits to spend no more than 35 percent of donations they collect on fundraising.
However, the bureau's new seal program, expected to launch this summer, will let nonprofits display a symbol on their print and Internet communications showing the public their compliance with the rules, said Bennett Weiner, chief operating officer for the bureau's Wise Giving Alliance. The alliance monitors about 500 charities nationwide.
The group's release of the standards followed a U.S. Supreme Court hearing Monday in the case Madigan v. Telemarketing Associates, in which Illinois charged a professional fundraiser with fraud for keeping a majority of the proceeds it collected for a Vietnam veterans charity.
The organization has been developing the standards and seal program for about several years, and the announcement on the same day as the Supreme Court hearing was a coincidence, Weiner said. The Supreme Court case, formerly known as Ryan v. Telemarketing Associates, was changed to reflect Lisa Madigan's becoming attorney general of Illinois, the office that is arguing the case, at the beginning of this year.
The standards also call on nonprofits to be "accurate, truthful and not misleading, both in whole and in part" in solicitation communications. They also require nonprofits to be prepared to provide consumers with an annual report, including income, expense and asset information, on request.